Industrial new orders in the Euro area continued to contract in January, logging the steepest fall in about 13 years. The French economy contracted less than previously estimated in the fourth quarter of 2008, while it was confirmed that the UK economy shrunk in the fourth quarter at the fastest pace since 1980.

In other news, the Organization for Economic Co-operation and Development Secretary General Angel Gurria said economies in the 30-nation bloc are forecast to shrink 4.2% this year versus an earlier projection of 0.4%.

Eurozone

Data released by the Eurostat showed that industrial new orders in the Eurozone plunged 34.1% on an annual basis in January, sharper than the 23.8% drop recorded in December. New orders fell for the sixth consecutive month, and the January drop marks the steepest on record. Industrial orders also declined more than economists' expectations of a 28.4% drop.

Germany's Federal Statistical Office announced that the import price index dropped 5.4% year-over-year in January, after falling a revised 4.1% in December. This was the steepest decline since February 1999. Economists were looking a decline of 6% for January.

The statistical agency also announced that the number of employees in manufacturing rose 0.3% annually in January to 5.2 million persons. However, the number of hours worked and gross earnings declined.

Latest data released by the French statistical office INSEE showed that the gross domestic product or GDP fell 1.1% quarter-on-quarter in the final three months of the previous year, less than a 1.2% decline estimated previously. In the third quarter, the economy expanded only 0.1%.

Italian retailers' confidence indicator declined to 91.7 in March from 94.6 in February, economic think tank ISAE said. The survey found pessimism was widespread with regard to the current economic conditions.

Italian industrial orders plunged 31.3% year-on-year in January due to a 30.6% fall in domestic orders and a 32.5% decline in non-domestic orders, statistical office ISTAT said. Economists had forecast total orders to drop 21.8%. Total industrial turnover slumped 25.1% in January from the previous year.

Statistics Finland said the consumer confidence indicator increased to minus 1.5 in March from minus 3.9 in the previous month. Elsewhere, the Confederation of Finnish Industries EK said its confidence indicator for the country's manufacturing sector increased slightly in March, but remained at a very low level.

The Austrian Institute of Economic Research, or WIFO, revised its GDP outlook for 2009 and 2010 as the worst recession since the World War II has taken its toll on the economy. WIFO now expects the Austrian economy to contract 2.2% in 2009, quicker than a 0.5% fall projected in December last year. For the next year, the think tank sees an expansion of 0.5%, which was also lowered from an initial projection of 0.9% growth.

The Statistical Office of the Slovak Republic said the economic sentiment indicator declined 3.4 percentage points to 73.1 in March from 76.5 in February. This is the lowest reading since January 1997. Further, the agency announced that producer prices in the domestic market rose 1.8% annually in February, at a slower pace compared to a 3.7% increase in January.

The Statistical Office of the Republic of Slovenia announced that the retail sales without value added tax rose a working day adjusted 0.2% year-over-year in January, after falling 2.1% in December.

Rest of Europe

In the UK, the Office for National Statistics said the British economy shrank 1.6% sequentially in the fourth quarter, revised down from a contraction of 1.5%. In the third quarter, GDP was down 0.7%. Two consecutive quarters of decline in GDP denotes a recession. Thus, in the fourth quarter, the economy entered its first recession since 1991 and recorded the largest sequential fall since 1980.

The ONS also reported that UK's current account deficit narrowed to GBP 7.6 billion in the fourth quarter of 2008 from a revised deficit of GBP 8.2 billion in the previous quarter. Economists had expected deficit to contract to GBP 5.9 billion, while the third quarter shortfall was revised from a GBP 7.7 billion deficit.

The UK economy may recover by the end of this year, while the near term situation is bleak, the Bank of England chief economist and executive director Spencer Dale said. In a speech at the Association of British Insurers Economics and Research Conference in London, Dale said, As we go through 2009, I believe it is most likely that the pace at which output is contracting will ease and that we will see some signs of recovery by around the turn of this year.

Elsewhere, Chancellor Alistair Darling said in a speech that the government will have a significant role in the banking sector for some years to come.

The Swiss think tank KOF said its economic barometer fell to record low of minus 1.79 in March from February's revised minus 1.37, implying that economic activity in the country will continue to decline. Economists had expected a reading of minus 1.55 for March. The KOF said the current level of the indicator is the lowest level since the beginning of the series in 1991.

Statistics Lithuania announced that the retail trade turnover plunged 29.8% year-over-year in the January to February period, in contrast to a 22.4% rise in the corresponding period of the previous year. The agency also reported that the export price index dropped 6.4% month-on-month in January. Meanwhile, import prices declined 6.7%.